Regional Towns Drive Business Lending Boom

Australia's regional towns are emerging as business growth hubs, with a 12.4% rise in Westpac's business lending over two years, outpacing the 11.3% increase in metro areas. This shift reflects businesses tapping into affordable land, thriving local markets and growing talent pools outside capital cities.

The trend is particularly strong in regions like Coffs Harbour, Launceston, Tweed Heads and Bendigo, which have seen significant growth in Westpac's lending. In Victoria, regional lending grew by 18%, double the 9% growth in metro areas, while Tasmania's regional lending surged by 25% compared to Hobart's 10%.

Key industries driving this regional shift include healthcare, education, property, manufacturing, and logistics. Businesses find it easier and cheaper to operate in these areas while benefiting from lifestyle-driven migration. For example, Gold Coast-based Naked Harvest supplements has expanded its workforce to 25 employees and aims for double-digit growth.

Challenges remain, with rising interest rates, higher operating costs and weak consumer sentiment leading to a surge in business failures. However, regional Australia’s appeal continues to grow, supported by cheaper land and supportive councils keen to attract businesses.

Westpac highlights regions like South Wimmera, Coffs Harbour and Fitzroy Shire as standout performers in business lending growth, showcasing the potential for a decade-long "regional renaissance." While metro areas still dominate in lending volume, regional hotspots appear poised to redefine Australia’s business landscape.

Sources

• Westpac backs business growth with 200 new bankers

• Expanding partnership with Many Rivers microfinance - Westpac

• Businesses can't ignore the crest to the West - Westpac

• Westpac Small Business Report